Abstract:

This study uses the World Bank Global Findex Database 2014, to test the relationship between individual characteristics and borrowing and saving in Palestine.  We find that age is positively related to all borrowing purposes, i.e. education, medical, business, and home/land. It was found also that female variable is related to borrowing for business, and home/land. The secondary education level is found to be related to borrowing for education. But the tertiary education level has no relation with any of the borrowing purposes. The income level is some relation with some of the borrowing purposes. In regards to savings, it was found that saving for age and saving for education are related to the variables: age, female, secondary education, tertiary education, and the first three income quartiles, the relation has different levels and signs. But has no relation to the fourth quartile “rich”.  Formal saving is found related to age, tertiary education, and the first three income quartiles. Saving in general is related to tertiary education, and the first three income quartiles only. Formal borrowing is linked to age, female, tertiary education, and the first income quartile only. And general borrowing is related to only age, and the first three income quartiles. We recommend further studies, to examine other factors that could have an effect on the borrowing and saving behavior of the citizens.